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Some years ago I read this NBER working paper. (Note – a couple years later a slightly modified version appeared in the American Economic Journal but I will quote from the earlier, non-paywalled version since it is available to everyone.) Here’s the issue, in a nutshell: In this paper, we use administrative data from the Houston Independent School District and the Louisiana Department of Education to examine whether the influx of Katrina and Rita students...

from David Ruccio It comes as no surprise, at least to most of us, that corporations are getting larger and increasing their share in many different industries. We see it everyday—when we buy plane tickets or try to take out a loan or just make a purchase at a retail store.   We know it. And now, it seems, economists and the business press have finally taken notice. According to recent research by Gustavo Grullon, Yelena Larkin, and Roni Michaely, More than 75% of US industries have...

Starting to look seriously ominous: When delinquencies start going up, banks tend to start tightening up lending standards a bit to keep them in check, which tends to slow down lending, which causes the economy to soften, resulting in a downward spiral that doesn’t end until public sector deficit spending increases sufficiently: Released Feb 23 For what it’s worth:

Below, three sets of graphs from three ‘structural’  seconomic tudies which show that the celebrated concept of NAIRU, as defined in these general equilibrium models is little more than a complicated running average of the level of estimated unemployment (though, quite unscientific, economics does not even seem to have an agreed upon algorithm to calculate this average). This a consequence of the assumption of these models that unemployment is a voluntary state of existence. Yesterday,...

from Lars Syll Again and again, Oxford professor Simon Wren-Lewis rides out to defend orthodox macroeconomic theory against attacks from ‘heterodox’ critics like yours truly. A couple of years ago, it was the rational expectations hypothesis (REH) he wanted to save: It is not a debate about rational expectations in the abstract, but about a choice between different ways of modelling expectations, none of which will be ideal. This choice has to involve feasible alternatives, by which I...

These service sector surveys are ‘soft data’: Markit : ISM: Another income measure that’s going nowhere: Trumped up expectations: Gauging Firm Optimism in a Time of Transition

from David Ruccio There doesn’t seem to be anything remarkable about mainstream economists’ rejection of the new populism. Lest we forget, mainstream economists in the United States and Europe (and, of course, around the world) mostly celebrated current economic arrangements. As far as they were concerned, everyone benefits from contemporary globalization (the more trade the better) and from the distribution of income created by market forces (since everyone gets what they deserve). To be...

Here is the abstract from a paper that appeared two years ago in Molecular Psychiatry: Intelligence is a core construct in differential psychology and behavioural genetics, and should be so in cognitive neuroscience. It is one of the best predictors of important life outcomes such as education, occupation, mental and physical health and illness, and mortality. Intelligence is one of the most heritable behavioural traits. Here, we highlight five genetic...

Yes, recent ‘hard data’ has driving down GDP estimates, trumped up expectations not withstanding: At current pricing the Saudis are seeing less demand, due to others pumping more most likely: This chart tells me that it’s gotten a lot harder to be eligible for unemployment benefits this cycle, and an automatic fiscal stabilizer the cushioned weakness in prior cycles may have been deactivated as well: New law makes it harder to get unemployment New rules make it harder to get...